Words in Patents: Research Inputs and the Value of Innovativeness in Invention

Mikko Packalen and Jay Bhattacharya

No 18494, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Intelligently allocating research effort and funds requires deciding whether to build on recent advances or on more established knowledge. When recent advances create superior opportunities for invention, their adoption as research inputs in the invention process promotes technological progress. The gains from pursuing such innovative research paths may, however, be very limited, due to the undeveloped nature of new knowledge, quick obsolescence of fast-improving knowledge, and the vast scope of the existing knowledge base. In this paper, we first develop a new approach to identifying research inputs in invention. Next, we estimate the value of pursuing innovative research paths that are created by the arrival of new research inputs. We identify research inputs based on a natural language analysis of 10 billion word and word sequence patent pairs in 6 million patents granted during 1920-2010. This novel textual analysis empirically reveals which single and general purpose technologies and scientific discoveries have been popular as research inputs in invention. We estimate the value of innovative research by comparing patents that mention these research inputs early against the value of other patents. For this comparison, we develop also a new measure of patent value. The measure distinguishes between citations that reflect the cumulative nature of invention and citations that may merely reflect similarity.

JEL-codes: I1 O31 O32 O33 (search for similar items in EconPapers)
Date: 2012-10
New Economics Papers: this item is included in nep-ino, nep-ipr, nep-pr~ and nep-knm
Note: EH PR
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Citations: View citations in EconPapers (7)

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